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Importance of Essential Elements for Formation of Valid Contract

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Added on  2019-10-12

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This report explains the importance of essential elements required for the formation of a valid contract, the main types of contracts and their impact in the UK. It also discusses the nature of liability in tort and liability in contract, conditions to prove negligence, and the meaning of strict liability in tort. Additionally, it covers the extent to which businesses are vicariously liable for the 'wrongs' of their employees.

Importance of Essential Elements for Formation of Valid Contract

   Added on 2019-10-12

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REPORT: XYZ, ANDREWS & HOPKINS----------------------------------------------------------------------------------------------------------------TASK-11.1 Explain the importance of the essential elements required for the formationof a valid contract 1. Agreement 2. Contractual Intention 3. Consideration 4. Capacity and 5. Certainty Agreement: a valid agreement requires offer and acceptance, a valid considerationand intention to create a contractOffer and Acceptance-an offer is an expression to show the willingness of the personto create a legal relation. Acceptance on the other hand, is an expression of assentto the offer that leads to the formation of an agreement. In this regard, an offer must be distinguished from the invitation to treat to the extentthat the person communicating is not making an offer but is invites the person to doso. Such is the case with advertisements as explained in Scenario no 1. Here, Billby placing an Advertisement makes an invitation to treat, inviting people to make anoffer. On the other hand, Bill by communicating to Liza specifically the sale of theoffice computer for £ 550 is making a concrete offer for sale. ConsiderationThe common law principle of quid pro quo explains the consideration, wheresomething of value has to be made for the fructification of contract. Intention to create a contractThe parties to the contract have to have an intention to create legal consequences.Both the parties to the contract should have a clear conscious intention to make avalid contract with the other party to the contract.[ CITATION PSA05 \l 1033 ]Capacity to the contractPersons entering contract have to be legally capable to create a legal relationship.They have to act without duress or coercion, and give free consent to create acontract.Certainty The terms of agreement have to be certain and not based on vague terms which caninvalidate the agreement. 1.2 Discuss the main types of contracts and their impact in UK
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Unilateral Contract-Where one party makes a promise to perform without anyreciprocation from the other party.Bilateral Contract-When the offerors makes a promise in return for the promise bythe offeree.Express Contract- where the contract terms and conditions are written and clearlyemphasized. Such contracts include signatures to avoid any complications. Implied Contracts-where the responsibilities and the terms and conditions arisingfrom an agreement are not expressed in writing as the person making it, but by theintention of the person making it.Standard Contract-where the terms are well documented, represented by parties ortheir representatives, sealed and signedVoid and voidable contract- A void contract cannot be enforced by either party. Inother words, it is void ab initio as the law treats it to have never been formed.A voidable contract is a valid contract which cannot be enforced as usually only oneparty is bound by the terms of the contract. 2.1In the above case of Bill and Cathy, the advertisement amounts to invitation to treat,thereby make an offer to the general public to make an offer. Cathy by making acounter offer to buy the printing press for £80,000 has made an offer subject to theacceptance of Bill. Bill by agreeing to the earlier amount stated by Liza has shownhis acceptance to the offer made. In the case of Bill and Liza, there is no valid contract that exists. In the first instancewhen Liza posted a letter to Bill, it showed her willingness to accept the offer made.Going by the “postal rule”, the acceptance is deemed to have been communicatedthe moment she has posted the letter. In between the gap between the day ofposting and the letter being received by the proposer, was used by Liza to withdrawthe acceptance made by speedier mode of communication. Hence, the revocationnotice has been received by Bill before he received the letter of acceptance. Doctrine of Promissory EstoppelThe doctrine of Promissory estoppel’ is based on the common law of equity whichprevents a person from going back on the promise made or forgo strict contractualrights. [ CITATION Dav142 \l 1033 ]Hence, where one party promises to perform and theother party relying on such a promise suffered significant detriment, he can claim forrelief by way of making the promissor fulfil the promise.
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Task 2-SHORT ANSWERSAnalyze the terms in the contracts with of contract and its impactConditions:A condition is the backbone of any contract, the breach of which can result insubstantial loss to the claimants. In the case no. 1 Joyce entered into the contract fora period of three months. Having fallen ill four days before the opening day, she hascommitted breach of contract and the act of Royal Albert Company in replacing herwas a valid one. The decision has been held in Poussard vs. spiers [1876], whereclaimant having fallen ill missed the opening show. The court held that there wasbreach of condition as she missed the opening night and the most importantperformance. Warranty: is an term which gives the parties the right to claim damages to aparticular extent, in cases where some problem arises in the product.Implied and Express Terms:Implied terms are terms wherein the parties have not mentioned the terms clearly,lucidly or expressly, and Express terms are wherein the terms are laid down clearlyby the partiesEffect of Express and implied terms The effect of the implied terms is that often the parties have to imply and make acommercial sense of the contract. In the above case wherein the claimant farmerwas refused the payment towards the cost incurred for seeds, etc. was under impliedterms with his landlord. The decision in Hutton v Warren [1836], is on the similarlines where the court held that the terms are implied by its usage and custom andhence the ruling was given in favor of the farmer tenant.On the other hand, express terms are the terms which are laid down by the parties tothe contract with an intention that they are integrated in the contract, thus making theparties binding into the contract. In this case between Scammell and Ouston, theparties had laid down express terms wherein Scammel supplied a van for £286 andOuston was to trade his old van for £100. The contract having not fructified, theparties will have to suffer the loss due to Scammel not supplying the van. Task 2-SHORT ANSWERS ON EXCLUSION CLAUSE Scenario BValidity of Exclusion clauseIn the above case, the City Car Rental can be held liable for the injury caused. TheLimited liability being the exclusion clause was not the part contract viz., signed
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